Latent View Analytics Ltd (LATENTVIEW) Q3 FY22 Earnings Concall Transcript

Latent View Analytics Ltd (NSE:LATENTVIEW) Q3 FY22 Earnings Concall dated Oct. 27, 2022

Corporate Participants:

Asha Gupta — EY Investor Relations

Rajan Sethuraman — Chief Executive Officer

Rajan Venkatesan — Chief Financial Officer

Analysts:

Vimal Gohil — Elkem Capital — Analyst

Krish Narkar — Anand Rathi — Analyst

Karan Uppal — Phillip Capital — Analyst

Dipesh Mehta — Emkay Global — Analyst

Dave — Invest Jenna — Analyst

Chintan Shah — Chanakya Capital — Analyst

Akshay Kothari — Envision Capital — Analyst

Shriram Manantial — Investor — Analyst

Presentation:

Operator

Ladies and gentlemen, good day. And welcome to the Q2 FY ’23 Earnings Conference Call of LatentView Analytics Limited. [Operator Instructions]

I now hand the conference over to Ms. Asha Gupta from EY Investor Relations. Thank you, and over to you.

Asha Gupta — EY Investor Relations

Thank you, Stephen. Good evening to all participants in this call. Before we proceed, let me remind you that the discussion may contain forward-looking statements that may involve known or unknown risks, uncertainties, or other factors. Which must be due in conjunction with our businesses that would cause future results, performance or achievements to differ significantly from what is being expressed or implied by such forward-looking statements. It gives me great pleasure to invite all of you to the Q2 FY ’22 earnings call of LatentView Analytics Limited. The recent and investor presentations have been made to you in case anyone does not have a copy of press release or presentation, [Indecipherable] as mailings, please do [Indecipherable], and we will be happy to send you the link.

To take us through the results today and to answer your questions, we have the CEO of the company, Mr. Rajan Sethuraman, whom we will be referring as Rajan. And we also have CFO of the company, Rajan Venkatesan, whom we will be referring as Raj, to avoid any confusion while doing transaction. We will be starting the call with this update of the quarter, which will be given by Rajan, which will be then followed by the financials, given by Raj. Having said that, I now hand over the floor to Rajan. Over to you, sir.

Rajan Sethuraman — Chief Executive Officer

Thanks, Asha. And thank you all for joining this earnings call. First of all, I wanted to wish all of you belated [Indecipherable] that this is a festive week. And it’s indeed a pleasure to connect with all of you on the back of strong results that we have had for this quarter. We had a good set of numbers for this quarter as well. And I wanted to share some highlights of this quarter, right, both from a business perspective as well as in terms of people’s standpoint. And post that, I will hand over to Raj to cover some of the highlights of the financials. So first off, we added five new accounts this quarter, and two of them happen to be in the Fortune 500 list. But the other accounts as well a very interesting mix of opportunities spanning a fairly broad spectrum of work that we do across data engineering, consulting as well as both diagnostic and descriptive as well as product or prescriptive analytics work.

This was also the first quarter where we signed our first $2 million plus annual revenue contract. In the past, we have had several accounts where the total annual billing across multiple contracts is much in excess of the number that I mentioned. But this is the first instance where we had a single contract, one statement of work exceeding $2 million in annual revenue. So it was a first of sorts and in some ways, this is in line with what I have been sharing on earlier calls, regarding the maturity of the data analytics space, and how data analytics is becoming more mainstream as organizations are accelerating their digital transformation journey, and see data analytics as fairly important and integral part of the journey.

We saw very healthy demand for our consulting data engineering and our supply chain analytics capabilities across the new logos that I mentioned, for example. Particularly, we saw really good traction for the connected view value proposition that we have been articulating under the supply chain analytics umbrella. This is a value proposition that helps clients see across their entire supply chain landscape and help solve them for multiple pain points and opportunities in the supply chain, bringing critical data and analytics to different personas in the supply chain, helping them make high-quality decisions. Our engagement with one of the leading toys manufacturer globally is leveraging the supply chain connected value, connected new value proposition.

And we believe that this start will lead on to further work that we do for them in the supply chain area as well as in other areas as well. From a people standpoint, there were several interesting milestones for us this quarter. We crossed the 1,000 people head count this quarter. We also on boarded 100-plus campus hires over the course of this quarter. And most importantly, we were also certified by the Great Place to Work Institute. And that is indeed a matter of pride for us. And this is something that we were able to share not only with our current employees, but the broader talent base and alumin as well. And we saw really good share as well as encouragement from most of them during our interactions.

We also managed to revive our analytics roundtable that have been a regular feature in the past prior to the pandemic. We have put that on pause mode due to the pandemic related travel restrictions and constraints. But we were able to revive it this quarter. And the theme of the roundtable this quarter was improving customer experience using the power of data analytics. And we were really happy to note the extensive participation not only from existing clients and stakeholders, but also a number of prospects with whom we have been able to engage in bringing many of the interesting ideas, and value propositions that we talk about within this customer experience area. So good interactions during that time period. And we believe that this is also a sign of much more to come in terms of what we can do for clients in this particular area.

We also saw several — first from a partnership standpoint, we signed partnership arrangements with new 4G and Arango BB, both of them play in that data — in the graph theory and graph database space is bringing very strong solutions and capabilities. And this is something that we’ve already started leveraging and planned and prospect conversations in terms of how they can use the power of graph database to solve problems. Especially where there’s a lot of nonlinearity and interrelationships like between the different variables that they are considering. We also signed a partnership with IBM, specifically focused on the Indian market, more so in the financial services sector, but could also get extended into other spaces, and also with Databricks who are another leading player in the newly emerging cloud data ecosystem.

We already have a partnership with Snowflake, and this additional partnership that we have signed with Databricks is also a step in the right direction in terms of leveraging the huge amount of activity that we are witnessing in the cloud ecosystem. From a people perspective, this quarter also saw the addition of quite a few people to our sales and business development team, we added about eight people into that team. And we also brought on board four seasoned senior leaders to head up our European business, one — two in the data engineering space to head up the data engineering practice, and two senior leaders to head up the business practices that we have for the industrials and the technology vertical.

So strong additions that we have made into the front end, both on the sales and business development as well as on the business practice leadership front. Finally, I also wanted to touch upon what is happening on the inorganic growth on the M&A front. We have evaluated quite a few opportunities over the last year since the IPO, couple of them went as far as issuing a letter of intent and also due diligence. But until now, we have not been able to consummate a deal. The last two deals where we went until the LOI due diligence stage, we had to drop for certain considerations that doesn’t meet our criteria when it came to the final analysis.

However, what we have done since then is to engage a couple of external partner firms to help us identify opportunities. And at this point in time, there are about 10 of them in early stages of discussion and analysis. So while the going is slow on this front, we do want to be deliberate and careful that we are actually identifying the right kind of opportunities, and integrating them right into the fold. And given that this will be the first acquisition that we’ll be doing. We also want to make sure that we are doing it the right way and not in any hurry. We expect that there’ll be more progress in the next one, two quarters and there will be closer to [Indecipherable] find something as we get to the close of this fiscal year.

So with that, I’ll hand it over to Raj to touch upon the financial highlights, and then we can go from there to Q&A.

Rajan Venkatesan — Chief Financial Officer

Thank you, Rajan. Good evening, everyone. I’m belated Diwali wishes to everyone, given the deal in the week of Diwali. Like Aji mentioned, we are happy to announce a set of strong numbers. for Q2. After Q1, which was a little maybe muted in terms of earnings growth, Q2, we witnessed a fairly strong bounce back in the overall demand situation. plus as well as the new deal flow. On a quarter-on-quarter basis, we’ve registered a revenue growth of about 10.4% on a sequential basis and about 97% on a year-on-year basis. We closed the quarter with a revenue of about INR132.4 crores, which is the highest ever in the company’s history. The growth was fairly broad-based and driven across all our industry verticals, primarily technology, CPG, retail and BI, which continue to be the focus area for us from a vertical standpoint, the revenue growth, which was driven across all these three verticals.

We also see fairly healthy order book at this point in time as well as good pipeline, which gives us the confidence that we will be able to continue the current growth trajectory in the coming quarters as well. From a profitability standpoint, EBITDA for the quarter came in at INR37.3 crores, which reflected a growth of about 40% on a year-on-year basis and at seven-plus percent on a quarter-on-quarter basis. The EBITDA margin itself for the quarter was at 28.2%, a drop of about 80 basis points compared to the immediately preceding quarter. The drop in EBITDA margin was primarily driven by increased investments, both in the delivery capability building that we are doing in India, Rajan spoke about the campus hires that we did. A lot of these hires that we’ve done through the campus are currently undergoing their boot camp training and therefore, not in build roles. So the incremental cost owing to the campus hires plus the investment that we are making in the front end.

These are investments we are making ahead of the curve in anticipation of revenue growth that will follow. Both of these led to a marginal decline in the EBITDA margin for the current quarter However, this is still in excess of the historical EBITDA margin that we have been guiding the analysts as well when we’ve been talking to you guys, we historically, we’ve repeated that an EBITDA margin of between 25% to 28% is sort of the comparable levels at which we will continue to operate. But all in all, our EBITDA margins despite these higher level of investments continue to be in excess of that 25% to 28% brand that we’ve indicated. And therefore, we are fairly confident that we’ll be able to sustain these EBITDA margins for the coming quarters as well. Our PAT for the quarter stood at INR37.3 crores, which reflects a 70% growth, 70% plus growth on a year-on-year basis and 18% on a quarter-on-quarter basis.

Coming to PAT itself — there was a onetime benefit or say, I would say this benefit would sort of come to us even in the next couple of quarters. This is owing to exit ESOPs in the U.S. where in the U.S. — for the difference between the fair market value of shares as on the day of the excise and the price EBITDA, the options were granted is allowable as an expense. — for the purposes of tax and therefore, in this quarter, when we opened our excise window, there was a substantial excise of options by our U.S. employees, which resulted in a onetime benefit on taxes. In the long term, of course, we expect our effective tax rate to go back to the 25% levels, but the lower PAT in the current quarter is all going to the tax benefit that we got in the U.S. Coming to our H1 performance, operating revenue stood at INR22 crores, which again reflects the growth of about 38% on a year-on-year basis.

EBITDA margins for the half year again stood at about 2.6%. And sorry, PBT increased by 5.8% to INR851 crores for the first half. In terms of U.S. continues to be the dominant geographies for us, contributing about 95% of our operating revenues. Europe, while still being small. The update — big update on Europe is we have now seen substantial addition in our front-end team in the European region. We’ve hired a head of business as of end of last quarter. In fact, we started working with us effective 1st of July. We’ve also onboarded close to about 4 to 5 people who will be positioned in the European geography, Germany, Netherlands and U.K. as well. And we hope that we will be able to drive growth in the European region in line with what we had stated earlier. In terms of our balance sheet, our cash flow has continued to be fairly healthy. Overall cash balance, including the IPO balance is currently at about INR1,000-plus crores.

However, the last point that Rajan spoke about was on M&A itself, we have seen increased levels of traction within the company in terms of our deal evaluation as well as the pipeline of opportunities that are currently available for us to go after. As mentioned, a couple of these transactions, we focus to a fairly advanced stage — but we had to sort of drop the ball on them because of various issues, including cultural equipment overall fitment in terms of strategy as well as our estimate of what the right valuation for those companies should be. But having said that, we do continue to see good momentum. We’ve, in fact, appointed a couple of advisers to now help us to scout for potential acquisitions, and we are fairly hopeful that we should be announcing something on the M&A front in the coming quarters.

With that, I would like to summarize by saying that we continue to witness good momentum on the organic side, good deal flow. The order book continues to be healthy. Pipeline continues to be healthy. We will continue to again invest for growth and capacity enhancement and — as far as the revenue growth outlook is concerned, at least for the next few quarters, we would like to replicate the performance in the current quarter.

With that now, I would hand it back to the operator, and we can open the floor for Q&A.

Questions and Answers:

Operator

Thank you. [Operator Instructions] Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Vimal Gohil from Elkem Capital.

Vimal Gohil — Elkem Capital — Analyst

Sir, my first question is on the hiring outlook of attrition trends and offshoring trends. If you can highlight on these three, how much are we expecting to ported — we are just about 1,000 plus. How much do we how big do we see a team by the end of this year? Secondly, how is the position will bid by point out something on the supply chain. But if you could just highlight how have the LTA or GT attrition trend being like?

And plus, if you can just highlight something on the offshore trend that because you are sort of winning new large contracts this will probably gain a bit of on-site on-site presence as far as your company is concerned, does that mean that there will be some kind of margin pressure going forward by the revenue might remain very, very strong. And that could mean that we could be at the lower end of could that mean that we could be at the lower end of the margin band that you’re talking about. And yes, and I’ll probably have a couple of follow-up

Rajan Sethuraman — Chief Executive Officer

Yes. Wimal, Rajan here. let me address that. So firstly, in terms of what we are witnessing in terms of additions, right, to the number of people — we kind of went past the 1,000 mark during this quarter. I think we are already up to 1,050 plus at this time. I’m expecting that the growth momentum that we are seeing will continue into the coming quarters as well. So while I don’t have a specific number, right, in terms of what headcount we will end up with at this — at the end of this year. we will have enough people to make sure that we are sustaining the growth momentum that we are seeing, right, in this quarter. So we are expecting that to continue as well, right, through the remainder of this year. Obviously, there will be some aspects of nonlinearity that could kick in, in terms of, one, leveraging some of the value propositions and the assets that we are building.

And secondly, also in terms of what will be the acceptance from continued price increases, right, that we can see in the market. So these things will play out in terms of what the impact will be on the number of people that we will need. Now having said that, from an attrition perspective, we saw the highest levels of attritions in the months of July and August. Since then, it has been tapering down. September and October have been much better, and we are expecting that the attrition will moderate in the coming months as well. And other thing is to go back to the kind of levels that we might have seen in the – during the pandemic or the second half of last year, for example. So that is something that we are factoring in as we make our hiring projections. From an on-site offshore perspective, for the nature of work that we are doing, we are not seeing any big swings.

The larger contracts as well continue to be at the kind of ratios that we are used to. We were operating at about 1 to 5.5% or so. There isn’t any big swing on that number in terms of the percentage of people that we need offshore. One area where we might need more presence on site is the consulting work that we are doing because that does call for an even more iterative approach working very closely with clients. But however, the consulting work, as I have shared earlier, is typically smaller, shorter duration intensive work aimed at defining a strategy or a road map. So we are not expecting that there will be like a huge set of people that we will need. I mean — and where we need domain expertise, we’ll be ready to leverage people even offshore who can travel at short notice for short duration of time are to do the work.

So I’m not expecting any big swing in the on-site offshore mix in the coming quarters. We will have to see how this plays out as the deals get even larger. Some of the deals that are larger in the past, we have witnessed that the ratios have been better than the smaller pieces of engagement because at the moment you have a large amount of work, then there is greater flexibility in terms of how you structure the work, and therefore, not only the onset offshore mix, but also in terms of the pyramid and the mix of skills that are required. So that should play to our advantage, right, as deals get larger in the coming quarters.

Vimal Gohil — Elkem Capital — Analyst

Understood, sir. Sir, the second question – I have two more questions. The second question is on the overall demand. And I have one bookkeeping expense. A bookkeeping question. Just on the demand outlook in the backdrop of the big techs recently announcing their numbers, some bit of caution was sort of highlighted – what are we seeing? Are we seeing any impact on because big tech certainly is a larger proof our business? So what are we seeing? Are we experiencing a bit of caution in those accounts for how we are going for us?

And the second question is a bookkeeping question. On the – while you said that you have invested in the front end and invested in capabilities that would – I think that will go in a certain portion of that we do in the employee cost, if I’m not, most of it will go in employee cost. But as I noticed, that has actually – that is – if you look at that in percentage of sales, that has been in control over the last quarter, but I see your operating expense is going sharply by 21%. So, how should we take – how should we look at that? I mean, should we take this INR14 crore as the run rate going forward? Or is there a one-off over there?

Rajan Sethuraman — Chief Executive Officer

Okay. Yes. Let me address the first question, and then I will ask Raj to [Indecipherable] the other question. We don’t see any particular impacts in the Technology sector yet. The one place where there has been a little bit of sluggishness is in Retail, where we have had some some kind of pause, right, in clients taking decisions with respect to new initiatives. But even in retail, we have actually closed an important win, not in the last quarter, but since end of the last quarter, right, I mean – and that seems to be in the right direction. But obviously, the retail sector has been impacted because of macroeconomic headwinds, right, talk of recession and everything. So I wouldn’t be surprised if there is some sluggishness within the retail sector.

In technology, we haven’t seen any sluggishness. I mean, both in terms of conversations as well as real opportunities maturing and client decision-making. What I will however, say is that some of the larger deals that we are pursuing. They will obviously take a little bit more time in comparison to deals that are, say, less than 0.5 million size because- it will mean that more constituents are from the client organizations are involved in that decision making. And obviously, it will take a little bit more time. But the conversations that we are currently having, they seem to be proceeding in that right direction.

One other thing that we are starting to see is some consolidation, meaning that there are accounts where within a particular part of the business, you might be engaged only in doing certain kind of work. And the client has been using multiple vendors for doing data engineering, for doing visualization and look back analytics and somebody else for doing the predictive best modeling work. There is some trend towards consolidation. We’ll still have to see how it plays out. But we are starting to see some signs of that. The good news for us on that front is that we are– we are already positioned well with the higher value-adding fuzzy problem-solving premium work.

So in our case, it will be more about backward integration into the data engineering work. And that is a capability that we have been aggressively building strongly. So I would believe that we are positioned well. Should that consolidation pick up steam. But as I said, it is still early days on upfront, and we’ll have to see how it pans out. So overall, not much sluggishness yet in the technology space. But obviously, you are starting to see some of the results in the commentary, and we’ll want to watch that closely right in terms of how it unfolds. Let me pass it to Raj to address your second question related to the numbers.

Rajan Venkatesan — Chief Financial Officer

Yes. In terms of the second question, correct me if I’m wrong, your question was in relation to the other operating expenses. Is that correct, where we witnessed a growth of about 21% in the current quarter compared to the earlier quarter?

Vimal Gohil — Elkem Capital — Analyst

Right, sir. That is right, sir.

Rajan Venkatesan — Chief Financial Officer

So just to sort of let you know, of course, while this growth seems to be a substantial growth over the immediately preceding quarter. It was not unanticipated or unplanned expenses. In the immediately by one quarter, we hosted our annual or biannual final roundtable event, which is a customer event that we typically hold in the United States. So this last addition of the customer event happened in San Francisco. And a large portion of the increase that you see compared to the earlier quarter was attribute or is attributable to this particular marketing event that we conducted, which was very well-received and also resulted in a significant amount of lead generation from potential and prospective clients.

Now of course, this is an event that in the last couple of years, we were unable to hold because owing to the pandemic. But, it’s something that we will drive. In fact, we will have another roundtable event, most likely early next year in February or March. And therefore, to that extent, this will be an expense that will be recurring in nature, going forward as well. As regards to the other reason as to why the operating expenses went up, that is also partially attributable to increased travel and visa cost, as we continue to see more and more people traveling to meet clients as well as people from our offshore locations are going to the U.S. and us enabling them with well permits and visas. So you will see increased levels of expense both on travel and visa costs.

So in that sense, these are not onetime in nature or nonrecurring nature. You would expect a similar level of [Indecipherable] to happen going forward. But a lot of this has- while it’s sitting under the other expenses bucket-a lot of this has a direct correlation with revenue. I mean, travel typically, most of the travel and visa costs is related to project-related travel and the marketing strength that we are doing will hopefully result in increase or enhanced revenue in the future. So to that extent, there is linkage to revenue as well.

Operator

Thank you. The next question is from the line of Krish Narkar [Phonetic] from Anand Rathi.

Krish Narkar — Anand Rathi — Analyst

Am I audible?

Operator

Yes, sir. Please go ahead.

Krish Narkar — Anand Rathi — Analyst

Thank you for the opportunity. So I know we’ve hired someone for Europe, and we also had some S&M personnel added in this quarter. So why was it sequentially not growing? Like even if it grew a little – So I had a question on that.

Rajan Sethuraman — Chief Executive Officer

Sorry, I’m not able to understand your question, Krishna.

Krish Narkar — Anand Rathi — Analyst

Europe was soft sequentially. I wanted to understand, are we seeing good demand there or for the next few quarters? Because in Q2, it was soft.

Rajan Sethuraman — Chief Executive Officer

Yes. No, the effect of the additions that we are making will take some time to play out. Europe, I mean, you might have heard from commentary by other companies as well. I mean, it is different, right? It is not the way you go to market and how you sell, it has its own nuances like Europe as a whole and within that each of those countries as well. In some sense, we are starting from pretty much scratch there, right, with the induction of the new Europe business head and the team that he’s building. I expect it will take at least two, three quarters to start seeing some decent momentum. Now having said that, we did win our first contract since our new euro business head came on board. It’s a small one, but it’s a good beginning. And it’s an account of the right sorts where there is plenty of other opportunity. And therefore, there’s good growth prospects that we can look at in that account.

In addition to that, there are at least half a dozen interesting conversations. Now the time taken for these to fructify will obviously be dependent on multiple factors. One, just in terms of our own ability to ramp up and build the necessary relationships and the connects with the right stakeholders in these prospects. More importantly, also how Europe pans out, right, from a macroeconomic perspective. So at this point in time, I would imagine that it will be at least a couple of quarters before we start seeing some momentum build up in Europe. However, the intent is that over a three-, four-year time frame that Europe will get to about 15%, 20% of our overall revenue mix and all the investments that we are making are with that objective in mind.

Krish Narkar — Anand Rathi — Analyst

Sure, sure. Thank you for that. And so I have a question on BFSI as well. Q2 seemed weak for both of these. Going forward, how do we see these verticals?

Rajan Sethuraman — Chief Executive Officer

Again, BFSI is definitely a vertical that we are doubling down on. I have again indicated this in the past, BFSI and retail are the two sectors that we want to double down. There is some sluggishness in retail, as I mentioned in response to an earlier question, but that doesn’t detracted us from ensuring that we are building a business development bandwidth, taking the right kind of marketing action, and as well as capability building and value prop and asset-building actions at the back end. So retail BFSI, I think we will continue to invest even over the course of any market or macroeconomic headwinds that might be there, right, in those sectors. Industrial, we have a new business head.

And interestingly, he comes from a very, very strong automotive background. So he has opened up multiple threads and conversations right at this point in time. And we are expecting that some of that will start paying dividends in the next one, two quarters. The automotive sector itself is undergoing significant transition, right, as more and more companies look to electrification and automation, right, and autonomous and so many other trends that are there in the place. And much of these really have a very, very strong underlying data analytics backbone, right, that will be the need of VR.

So we are expecting that given the strong relationship that we already have with two of the top automotive manufacturers right in the world, we’ll be able to carry forth the credibility as well as the capabilities that we have built right on the back of those two relationships into multiple other openings that are now coming up right on the back of hiring a new lead. So again, I would say that early days, but it looks promising in terms of the growth prospects within industrials.

Krish Narkar — Anand Rathi — Analyst

Sure, sure. Thank you for that. And just one last question on sales and marketing. Sequentially, we saw a decline in headcount. Should we expect you to add more or how should we see that moving forward?

Rajan Sethuraman — Chief Executive Officer

Sorry, we don’t even have a dividend.

Krish Narkar — Anand Rathi — Analyst

So we had 57% in Q1 and we have 52 in Q2.

Rajan Sethuraman — Chief Executive Officer

I’m not sure. Raj, are you aware of this? What–

Rajan Venkatesan — Chief Financial Officer

No, no, no. Actually, Krishna, you’re talking about — what are you talking about over years?

Krish Narkar — Anand Rathi — Analyst

The sales and marketing headcount that we share.

Rajan Venkatesan — Chief Financial Officer

I don’t think we share sales and marketing headcount.

Krish Narkar — Anand Rathi — Analyst

So by function, sales and marketing, it’s on slide 21.

Rajan Venkatesan — Chief Financial Officer

Okay.

Krish Narkar — Anand Rathi — Analyst

So the 52, which was there was 57% in Q1. I just want to understand what happened out there and why we saw a reduction of 5 of that quarter-on-quarter.

Rajan Venkatesan — Chief Financial Officer

No, no. So there, what you will also see some of that reduction that — so the onsite and offshore mix also over there is a little important. The addition of about seven to eight people that we spoke about were all in on-site roles. There is a lead generation stroke inside sales team that operates out of India as well. A lot of the — in fact, the deals that you’re seeing over there can be attributable to movement in that particular team, but I will come back to you on this, Krishna.

Krish Narkar — Anand Rathi — Analyst

And utilization for the quarter is similar to last quarter, around 78% old or are we seeing a buildup in the bench?

Rajan Venkatesan — Chief Financial Officer

No. So the utilization to be at similar levels. The bench, specifically, like I told you, has gone up only because of the campus hires that we hired. Most of them, again, I think through from October onwards, we’ll be moving to build a role for build projects. And therefore, you will you will see that utilization levels will start looking or inching upwards in line with historical trends. Typically, Q1 and Q2 is where bulk of the hiring happens through campuses. And therefore, to that extent, there is a buildup in the bench. But Q3 and Q4, typically, we tend to see the utilization level start to inch up again.

Operator

Thank you. [Operator Instructions] The next question is from the line of Karan Uppal from Phillip Capital. Please go ahead.

Karan Uppal — Phillip Capital — Analyst

Yes, thanks for the opportunity. A couple of questions from my side. Firstly, on Q3, if we understand correctly, Q3 seem very strong for [Indecipherable], so this time also, you expect Q3 to be strong and will it be better than Q2? That’s my first question.

Rajan Sethuraman — Chief Executive Officer

It’s — I mean, we’re not putting out a percentage guidance or anything at this point in time. But yes, we see strong momentum though, right? I mean we are already at the end of October, almost and going by what we have seen in this month and the expected deal closures and work to commence in the coming months, I would say that we will continue to have a strong quarter in Q3, yes.

Karan Uppal — Phillip Capital — Analyst

Okay. Okay. Thanks for that. Secondly, Raj mentioned that in his opening remarks that you would like to replicate the performance which you have done in the current quarter. So if I look at your H1 growth rate is almost around 30% in dollar terms. And last time when we spoke, you mentioned that you would like to target around 20% kind of a growth rate for the full year. So are you effectively increasing your expectation in terms of the revenue growth, maybe around 28%, 29% for the full year. Hello?

Rajan Sethuraman — Chief Executive Officer

Sorry. Raj, are you on mute?

Rajan Venkatesan — Chief Financial Officer

Yes. No, no, I’ll take that. So yes, thanks for the question. Like we mentioned, at this point in time, we are not guiding or giving out guidance in terms of what full year revenue growth would be. But to sort of answer that question, we have stated this in the past as well, while the industry is growing at 20%, we want to better that by sort of a fair margin. And therefore, a growth, overall growth between 25% to 30% is what we’ve set out to achieve on an organic basis. And at this point in time, based on the order book that we have, we believe we have a strong chance of maintaining those growth levels.

Karan Uppal — Phillip Capital — Analyst

Okay. Thanks. Thanks a lot of the clarification, Raj. And lastly, you mentioned about your partnership with IBM in Indian markets in the BFSI sector. So for this partnership, is there any investment commitment from retail view side to selling your solutions? And would that have any impact on the margins?

Rajan Sethuraman — Chief Executive Officer

Not too much. It is based on prospect by prospect at this point in time. So, we are not going to be going ahead and building a bench strength of people with capabilities and IBM-specific components, right, within the tech stack at this time. In fact, IBM itself is taking a fairly flexible approach with respect to that tech stack. So, while there are components in there, which are IBM proprietary, they are very much open and flexible in terms of clients picking and choosing even a best-of-breed approach, but fitting overall within the tech stack framework, right, that IBM has grown up. So, in some sense, at this time, some of the capabilities that will be needed to convert those opportunities are ones that we already have, even that we do a fairly broad spectrum of work across, we do work across a broad spectrum of technologies that are there.

So, we are not expecting that there will be a whole lot of upfront capability building a bench building that will be required. We are, however, calibrating and taking actions on specific opportunities, right, that we are in conversations with. So, currently, there is a discussion with one of the midsized banks where we are having a conversation. And with them, there are very specific requirements, right, in terms of what they want to do and therefore, what will be the technical and analytical skill set that will be required. So, there are any gaps in that we will seek to leverage the partnership to build those capabilities or certifications are the case me.

So, I don’t see any significant investments from a capability building, specifically for the IBM partnership. We did do that in reference to the Snowflake partnership, right, last year. And there might be a need to do that in some of the other areas, right, depending on the traction that we see. But obviously, in general, many of the partnerships, it’s a bit of a 2-way kind of a stream, meaning that we want to bring some of the accounts where we have a strong relationship to the table. And we are also expecting that the partner will bring such opportunities to the table and can, therefore, based on what we see, we will take a calibrated approach to building any additional capability or certification of bench imputation.

Karan Uppal — Phillip Capital — Analyst

Sure. Thanks a lot for the detailed answer on, and all the best for FY ’20.

Rajan Sethuraman — Chief Executive Officer

Thanks Karan.

Operator

The next question is from the line of Dipesh from Emkay Global. Please go ahead.

Dipesh Mehta — Emkay Global — Analyst

Yeah. Hi, thanks for the opportunity. Just want to understand about, most of the growth is driven by top clients, top 20 clients explain a large part of the growth. So can you help us understand how we are building the funders client bucket how many active clients currently we have and how we are seeing some of them are entering into maybe next top 20 for us?

Rajan Sethuraman — Chief Executive Officer

Sure. Let me take that, and a keep me honest, correct me if some of the numbers are slightly different. We have upwards of 50 clients right at this point in time. And you’re right that the top 20 clients obviously account for much of the revenue. It’s in line with our philosophy that we want to work with a few clients but go really deep in terms of the quantum of work that we are doing and the spectrum of work that we are doing for them. Also, we have mentioned that in general, we are looking at working with either the Fortune 500 kind of companies, right, which have a propensity to spend on data analytics and see it as an important part of that agenda or emerging companies where data analytics is the main driver, right, of their competitive advantage. And therefore, there will be the willingness to spend on the right kind of initiative.

So overall, the concentration is not something that we are unduly worried about because it is aligned with the philosophy of focus that we want. Typically, we have seen that we are able to add about a dozen-plus accounts or more right over the years. Obviously, that number will now increase it as the base itself increases. And we expect that about 15% of revenue will come from such new accounts. But 85% of the revenue comes from existing accounts, and that is something that we are continuing to see even in these quarters, which basically translates into growing the business that we have with the existing accounts. So, while there will be the aspect of continuing to look for high-quality accounts that we bring into the fold, the expectation also is that we will continue to grow revenue with existing accounts in a fairly aggressive fashion so that we are able to maintain that kind of 85%, 55%, 15% split.

In fact, I would expect that existing accounts as they become more mature and they accelerate their journeys, the initiatives that they will undertake will grow at a fairly fast clip. So, I don’t expect that balance to change significantly, right, in the coming quarters. We’ll continue to add new accounts, but the growth will be driven significantly by growth that we have in the existing accounts. So therefore, the concentration that you might see, while it will improve over a period of time, right? I mean, instead of stay having 20 accounts that contribute to the bulk of the revenues, in a year from now, it might be 30 year onsite. But we do expect to continue to be a fairly focused player, right, in terms of the lowers that we work with and the type of work that we do.

Dipesh Mehta — Emkay Global — Analyst

Sure. Just one follow-up on it. In terms of, let’s say, top 5, top 10 clients, can you help us understand how gross service index is changing over a period of time in terms of how many services we provide them? Thanks.

Rajan Sethuraman — Chief Executive Officer

I don’t have the exact percentages, but I can give you a qualitative answer in general, given the intention to expand the scope of services and do more for the accounts that we are working with, we try and bring in all facets of the capabilities, right, to the table. The best example of that is the amount of work that we are now doing on the data engineering side, which has really grown in a significant fashion, right, over the last 6 quarters or so, right, 6 to 8 quarters. we weren’t doing much of data engineering work. But today, quite a bit of the growth is coming from the introduction of the data engineering capabilities and the services that we can provide. One other area where we are seeing traction, as I mentioned earlier, is supply chain.

Given the massive supply disruptions that most companies have faced, our value proposition is resonating well, and we are expecting therefore that will be a new service, right, that we will be able to take into the market. That is very relevant, whether it is a retail or a CPG company or even for high-tech tech companies, right, especially the ones that are in the business of devices and printers and so on. So, we are seeing good traction for the supply chain capabilities as we believe that some of the other horizontal capabilities that we are building, say, around predictive analytics, especially around use of NLP NLG or graph-based approaches or image analytics are also seeing traction.

So the intent will be to bring these capabilities also with the existing accounts. So the evidence of the last 6, 8 quarters, is anything to go by, we expect that we will be able to expand the scope of services that we provide. But however, staying within the overall wheelhouse that we have, right, of data analytics. We are not looking to stray out of the wheelhouse at this time. But starting from analytics, consulting and strategy and road map access, all the way to data engineering and predictive prescriptive analytics, that full suite and again, cutting across the value chain is something that we will want to take into every one of the accounts that we work.

Dipesh Mehta — Emkay Global — Analyst

Thank you.

Operator

The next question is from the line of Dave from Invest Jenna.

Dave — Invest Jenna — Analyst

Hello. Thank you for taking the opportunity for my question. My first question was, you mentioned that you are expecting growth of around 25% to 30% on an organic basis. So, this is for this year or for the long term, over the long-term period?

Rajan Sethuraman — Chief Executive Officer

Raj, do you want to join?

Rajan Venkatesan — Chief Financial Officer

Yes. So again, like I said, this is while we’re not giving out a guidance, this is what we believe is achievable in the next few years because the industry itself is expected to grow at 18% to 20%, and we are making significant investments and also operate in areas which are expected to grow at a rate which is higher than the 18% to 20%. However, having said this, the one possibility that we will definitely not rule out is if there is any growth concerns or demand-related shrinkages that we witnessed because of the macroeconomic situation that is playing out in the U.S. and Europe, right? And because of which the industry growth itself falls to a number which is below 18% to 20%. There could be some impact on our overall organic growth as well.

But at this point in time, what our endeavor would be to beat the industry growth rate by a significant margin because of one that we’re making and also the areas that we operate in, which are largely around data engineering, advanced analytics and also our investments in Europe, which we believe once the demand situation improves or the macroeconomic situation improves, in Europe, we will be in a position to take advantage of the investment that we are making at this point in time to grab market

Dipesh Mehta — Emkay Global — Analyst

Okay. And my last question is, so you have mentioned earlier that premium work you are doing. So can you distinguish between what is the premium work and not so premium work? And — of course, the revenue percentage of your revenue, which comes from your premium book, if you can.

Rajan Sethuraman — Chief Executive Officer

So there isn’t a whole lot of low-end work that we are doing. In fact, much of the work that we do falls with a fairly tight band in terms of what we are able to charge right from a pricing standpoint for the work that we do. However, I will call out that the consulting work that we do will typically be a little bit more in premium, albeit that although it will be a shorter quantum of revenue. It’s a smaller quantum of revenue tax because consulting engagement in general, they are short and intensive and their aim that doing a strategy or a road mapping exercise right at a fast clip, and it will set up much other work, right, that will follow suit from an implementation standpoint.

So, there is a little bit of a premium feel, right, when it comes to consulting work. But across the rest of the work, whether it is data engineering or whether it is look back or look ahead analytics. In general, we have gone after the the complex sugar problem. So even within data engineering work, we take up more of the architecting and creating the additional data layers that are necessary for doing undertaking the complex analytics and answering the business questions as opposed to doing the regular lift and shift our cloud migration type of exit. Not that we don’t do some of those work at all. But in general, it has always been in connection with the business problem solving, right, in some sense.

To illustrate this better — much of the work that we do and the deliverables that we leave behind are not so much the data platforms are the pipelines that we build are the tax boards are the models that we built, but more the very specific actions and recommendations that we make on the particular business decisions, right, that people need to make, whether it is in relation to supply chain, inventory planning or network planning or whether it is related to marketing spend or advertising spend or going dark analysis or whether it is strategic, right, in terms of where should they be focusing on in terms of their own acquisition opportunities or investment opportunities.

So those are the questions that we answered, the ones that keep our stakeholders awake at night. And data analytics is more a tool, right, to answer those tough questions right and ensure that you’re taking the right call, in light of whatever data and information is available. So that’s been the nature of the work. So therefore, Overall, I would say that much of the work is of that nature. The think too much that we are pursuing, which is what we would call at the commoditized end of the sector.

Dipesh Mehta — Emkay Global — Analyst

Okay. Sir, so can I ask one more question?

Rajan Sethuraman — Chief Executive Officer

Yes.

Dipesh Mehta — Emkay Global — Analyst

So how much time does it take for a pressure to become bearable? So it might be higher

Rajan Sethuraman — Chief Executive Officer

So we have been averaging about about eight to 10 weeks, okay, at this time. I mean, obviously, in the last few quarters, there has been this big demand supply gap, right? And everybody is trying to accelerate the process. So we have witnessed instances where we have been able to get somebody productive even in a six-week time frame or even in a four-week time frame. — but the preferred model is where we get our people to spend a proper six-week kind of a boot camp under Capstone and then spend maybe another six weeks in a shadow kind of a mode so that they come to grips with the specifics of the client and the context and the nature of the work that we are doing before we actually get them into a billable road. So that’s what the preferred is. But if I were to go by data in the last few quarters, I would say that we are currently probably averaging about six to eight weeks.

Operator

Thank you. The next question is from the line of Chintan Shah from Chanakya Capital. Please go ahead.

Chintan Shah — Chanakya Capital — Analyst

Hi, thanks a lot for the opportunity. I just wanted to ask a little bit more on the production platforms business. If you could provide me more insights on what is going on in that area. And on this slide, I see two new products which we’ve added, part and EIS. If you could give me a little more color on it, what exactly

Rajan Sethuraman — Chief Executive Officer

Sorry, the second question, which are the ones that you mentioned Chintan?

Chintan Shah — Chanakya Capital — Analyst

Yes, part and AI assist that I see on the slides.

Rajan Sethuraman — Chief Executive Officer

Right, right. Yes. So I mean the overall commentary on the — I mean, I wouldn’t call them products really, I mean, because I think that might be presuming too much. Having said that, we have built a suite of assets and accelerators and maybe some of them we can actually call them a solution because they do address a particular pain point or an opportunity that might be there in the market. For example, Smart Insights are Casper, for example, right, MatchView, there are examples of that. I think Pat was an anomaly detection tool that we’ve built in order to help identify what data should be taken into account for specific modeling purposes, whereas AIS is just — I think it’s more along the lines of a chat bot — it is a solution that we built for a particular client and then we are able to abstract it and then create something that can help answer queries in a fairly user-friendly interface, right, using a chat bot kind of an interface.

So, while we have been building these in the past, and they have been largely helpful in opening those on new conversations and maybe providing some nonlinearity from an effort standpoint where we have been able to reuse either the entire asset or parts of it, right, in the work that we undertake. The intention going forward is that this will be a little bit more detailed and specific right to the value propositions that we are building. In the past, it was more a technical or a math play that we were doing because we had understood that algorithm or we have that capability to create something, right? — and it could have been a very technical kind of an asset or an accelerator.

Our going forward, the intent is that the assets accelerators will be very, very specific and focused on particular value propositions that we’re taking in the market. So, I talked about connected view, right, in relation to what you’re doing in the supply chain analytics area. And this connected due value proposition is going to be supported by a few accelerators and assets that we are building which will actually help deliver the connected view value proposition. So, therefore, the intent would be to more tightly integrate this into not just the selling under business development process, but also in the delivery of the very specific value propositions. So, I would expect that the contribution from these accelerators will increase in the coming quarters. And by that, I’m also expecting that there will be, therefore, more reusability and nonlinearity, right, that will come in in terms of effort versus revenue profile right going forward.

Chintan Shah — Chanakya Capital — Analyst

Okay. And the second question which I had was that out of the 10% growth that we have quarter-on-quarter, how much can we attribute to currency? And how much would be driven by claims increase in I would say, volumes for the time and vertical that we have rated.

Rajan Venkatesan — Chief Financial Officer

Yes. So roughly about 1.7% of that growth that you see in the current quarter or 1.8% of the growth is owing to the currency improvement and the remaining is all organic growth.

Chintan Shah — Chanakya Capital — Analyst

Got it. All right. Yes, these are the questions I had. Thank you so much and all the best.

Rajan Sethuraman — Chief Executive Officer

Thanks, Chintan.

Operator

Thank you. The next question is from the line of Akshay Kothari from Envision Capital. Please go ahead.

Akshay Kothari — Envision Capital — Analyst

Thanks for the opportunity. Am I audible?

Operator

Yes, sir, please proceed.

Akshay Kothari — Envision Capital — Analyst

Yes. Sir, I wanted to know regarding the inorganic growth, which we are looking for. There have been — there has been a significant traction for analytics forms by the investors, and we have been hearing a lot of business. So, are we going to invest as a minority holder? Or are we going to go for a full acquisition

Rajan Sethuraman — Chief Executive Officer

At this point in time, our at least, and this is probably true for the first 1 or 2 even acquisitions that we will be doing. We are looking at majority control. from — when we’re looking at inorganic opportunities, where we will, one, get to one title integrate the business and to also derive maximum synergy out of our investment into that business, and that is possible only if we take a controlling stake in that particular company. So at this point in time, looking at controlled or 100% buyout opportunity.

Akshay Kothari — Envision Capital — Analyst

Okay.

Rajan Venkatesan — Chief Financial Officer

And so the five accounts we added — what was the hook that got us this account? Was it only on the basis of cost? And how does the system work actually? Are there some tenders in some specific scope of work, which is outlined — or is it something based on some relations that we are able to generate

Rajan Sethuraman — Chief Executive Officer

I think in this quarter, the dive accounts that we added, I don’t think any of them was on the back of an RFP or a tender. Pretty much in all the instances, it was on the back of either an outreach and a fresh relationship that we see or an existing or a warm introduction that we would have gotten to somebody who had a mandate and who was looking, right, to get things started. I think in at least three of the instances, there was an upfront exercise around defining what needed to be done. — from a scope and conversation perspective, which evolved in a very iterative fashion, right, based on discussions with them as opposed to any concrete idea or use case that they might have had in their mind to begin with. So sometimes the introduction leads you to get started, right, to get the conversation going. But then the specifics of what needs to be done emerges, right, as part of the process.

Akshay Kothari — Envision Capital — Analyst

Okay. All this.

Operator

The next question is from the line of Shriram Manantial Investor.

Shriram Manantial — Investor — Analyst

Thank you. Thanks for the opportunity and congratulations on the great results. If I’m not audible just shout. Question to the latent analytics team is — in terms of acquisition, are you looking to — are you looking at companies that will add to your technical capabilities or is this acquisition to enhance your geographic presence, grow your sales from regions that you’re not present in.

Rajan Sethuraman — Chief Executive Officer

Right. So Sean, yes, thanks for the question. The intent is to actually try and use the inorganic route to plug gaps or maybe accelerate development in areas of focus. So there are five areas of focus, right, for us. From a geographic standpoint, it is Europe, and I have called it out. from a horizontal and type of work, data engineering and supply chain analytics are the two areas of focus. And from an industry standpoint, BFSI, banking financial services and and retail, right, are the two industries, right, that are on focus. So an ideal acquisition, right, if you had to find one like that, would be somebody who’s doing, say, retail supply chain work supported by data engineering capabilities as well in Europe because it will take multiple boxes then, right? But obviously, we don’t believe that all the opportunities that we identify and go after will take all of the boxes. — we are expecting that it will take a few of the boxes, right?

So maybe it is a very, very strong data engineering play, for example, cutting across multiple industries and maybe multiple geographies. Or it could be somebody who’s exclusively focused on the BFSI and the retail industry, right, with very specific value propositions that we have — that they have built for them. The intention with any of these would be that there is stickiness in the form of clients’ contracts are IP-based work that they are doing. So therefore, there is there is a confidence and comfort available, right, that as we acquire and integrate them into our business that there will be enough stand-alone momentum that these will have as they come into our foot.

Given that we are also growing and we are looking to actually spend much of our management attention and bandwidth, right, on the organic growth as well. We don’t want to look at opportunities where they will be needing substantive bolstering, right, even in the first one, two years. So the important point would be that there is some momentum on their own. — which can get further accelerated right by what we bring to the table. So those are the kind of considerations that we have in mind right at this point in time as we look at acquisitions.

Shriram Manantial — Investor — Analyst

Thank you, Aki, that was excellent. Very, very clear. Second question, just to get an understanding of the way you run the business. Is the revenue that you block predominantly time and material basis or it’s an outcome-based contracts that you write?

Rajan Sethuraman — Chief Executive Officer

Right. So what we predominantly operate in what we call a managed services model, okay? About 70% plus of our revenue comes in that model. And what we mean by managed services is that we have set up an analytics capability that will be responsible for executing a book of work, a set of initiatives or use cases, right, if you may. — over a fairly large period of time, right, running into several quarters. In all these managed services kind of contracts, we will have a master services agreement that runs into 3 or more years in many of these cases, actually — the MSA is over an indefinite period, meaning there is no termination date on the MSA. But the MSA provides the umbrella construct under which we can write multiple statements of work for the account.

And the way it happens is once we do the MSA based on the initial upfront consulting work that we do for them, where we define the analytics strategy or the road map of initiatives or in some instances, the client will already have that strategy and road map thought through, there will be an initial book of work that we will start with saying that, okay, here are all the pieces of work. And some of these are onetime, some of these are ongoing in nature. And therefore, this is the shape and size and configuration of the team that we need to have in place in terms of seniority, expertise capability. And then we build the client a monthly fee for the team that we put together. And then under the MSA, they will have the flexibility to add to the team as well as take out of the team, depending on the pace at which they want to move on the different initiatives that have been identified.

And we also continuously keep identifying other things that can be brought to the table in terms of new ideas, what else they can do with their data, what other analytics might help speed up their decision making, right? So all of this keeps contributing to the book of work and that is how much of the engagement grows in size over a period of time. So that is a typical preferred construct that we have. About 20% of the work or maybe 25% of the work is of a fixed fixed scope nature, where there is a very specific use case or a problem statement. And then we sit down and agree with the client in terms of — how do we go about solving that. And in some of those instances, the actual invoicing might be driven by specific milestones outside that we need to create for them as part of that engagement. So broadly, that’s the kind of concept that we have in place.

Shriram Manantial — Investor — Analyst

I’m not asking the third question, operator, just a second question, same thing I just — a little more clarity. So if you take the consultants that they run the managed services contract, you identify specific work that needs to be solved by a group of consultants across various seniority. So in the client evaluates do they evaluate it based on saying I put for this project on a monthly basis, I need 10 resources, three or four seniors, some of them are data engineers on of the market, etc.? Or is it that you say I will improve the I will reduce the fraud or I will improve an outcome, say, in terms of inventory turnover days or highly improve your attribution levels or it’s based on people ultimately.

Rajan Sethuraman — Chief Executive Officer

Yes. At this point in time, it is still largely tied to the effort straight down. So while there is a good amount of discussion that happens on the KPIs and the metrics that we will impact and the extent to which we might be able to move the needle. It is not an outcome-based pricing, okay? If that is the question you’re asking. So our fees are not tied to specific KPI movements or needle movements on the targets that we set up. What we use them for, though, is to ensure that whatever we have proposed as part of the statement of work the team composition and how we will do the work has a relationship, right, to the overall outcome. In fact, we actually take this very seriously, and we have an internal construct called [Indecipherable] service delivery excellence team that actually monitors and measures the outcome that we deliver.

The only thing is that, given that many of these KPIs that you are targeting to improve – they are not only influenced by the data analytics and the recommendations that we make. I mean, there’s a lot of things that need to happen at the client end as well. In terms of their arc structure, our processes or changes to policy or some implementation of recommendations that we don’t want to claim that all of the creditors on account of the work that we are doing, right, or the recommendations that we are making. I think this is something that will probably mature in the coming quarters and years.

There might be more willingness on the part of clients to actually say that at least in those instances where there can be very direct attribution to the particular recommendation that is being made or a change that is being implemented that could be linkages that are made to the fees as [Indecipherable], the outcome on the fees. But at this point in time, we don’t have outcome-based pricing, if that’s your question. In general, I don’t also see that too much within the data analytics space itself. Most of our peers and competitors also largely work on the back of model similar to what I outlined.

Operator

Thank you. We take the last question from the line of Karan Uppal from Phillip Capital. Please go ahead

Karan Uppal — Phillip Capital — Analyst

Thanks for the follow-up. I just want to understand in terms of the services- the nature of the work or the services in terms of consulting, analytics and data engineering. So at the time of the IPO, you mentioned that the [Indecipherable] was 15% consulting 60% analytics and 20% is data engineering. So in last few calls, you mentioned that data engineering has scaled significantly. So has this – has that split changed?

Rajan Venkatesan — Chief Financial Officer

So yes, I would say that data engineering is probably running at about 25% at this point in time. And I wouldn’t be surprised if it actually becomes even 30%, right, in terms of work. The reason being that larger, more complex initiatives, they call for more robust data platforms, integrating data across multiple silos that might exist within the organization.

So given that low-hanging fruit would be gone by then, right, where you use data from a particular business unit or a silo to tackle a simpler use case or a problem statement. And now you’re looking at more holistic or optimization, right, taking more things in [Indecipherable], the data platforms will become a necessity almost, right, the cost of doing business.

So I’m expecting that those initiatives will gain more traction. It will also depend-be dependent on the maturity of the company, right, on where they are within their own analytics or digital transformation journeys. But I’m expecting that data engineering will continue to grow in terms of the overall contribution to the revenue. So 25% approximately at this time. Potentially could go up to 30% right in the coming quarters.

Karan Uppal — Phillip Capital — Analyst

So in terms of the scalability between the CV of the services, consulting, analytics, business analytics and data engineering, and I believe that data engineering is the most scalable in terms of the deal sizes, correct me if I’m wrong. And is the management thought process to scale also in that line?

Rajan Venkatesan — Chief Financial Officer

Absolutely. You are right that data engineering initiatives will get larger, sooner than what you might witness on the predictive prescriptive or diagnostic descriptive analytics. And you are again right, that we are actually doubling down on data engineering. I mentioned that data engineering is one of the five focus areas that we talked about. We recently brought on board a new head of the data engineering business. We have actually shared that as part of the press release that we put out as well. And he is aggressively building out his team. And we are also changing the approach.

I mean in the past, data engineering was more a technical necessity, right, from a data integration perspective, right, that I just mentioned. But we want to also flip to suit and look at how data engineering can become the enabler of the business value proposition that we are driving. So I talked about connected view on supply chain, for example, right? We have been talking about subscription analytics, right, as a value proposition that we’ve been taking into the market. We believe that all of these business value propositions, whether they are industry-specific or whether they are addressing a particular part of the horizontal value chain can benefit a great deal from a more robust data engineering foundation, right? And that is how we want to reorient the data engineering value propositions that we are building. So they want to be stand-alone migration or governance or linear.

I mean you’ll have a few of those as well. But more so, we will focus on how the business value propositions can be supported by very strong data engineering foundation. And that is also the need of the hour and ask from most of the constituents that we are talking to because they are all interested in solving the business problem in a whole — in a more holistic fashion. But the first hurdle that they hit is one of data, right, where it resides and how do I bring all of it together and how do I organize it and keep it in a manner which lends itself for analytics. So I do believe that the data engineering value propositions will be something that we will focus on. in the coming quarters, right, on how we build it. So our investments will also, therefore, go in that direction.

Operator

Thank you. I now hand the conference over to Mr. Rajan Sethuraman for closing comments. Over to you, sir.

Rajan Sethuraman — Chief Executive Officer

Yes, thanks. I think I kind of touched upon pretty much what has been the highlights for the quarter. But I think in response to questions, I also talked about the focus areas. I do believe that there is a good amount of opportunity. So while there is some of the concern around the macroeconomic headwinds and what it might mean to spending on specific sectors, our thinking on this matter is that, as long as we stay very closely aligned with initiatives that can create real impact for our clients’ side on the P&L, either in terms of revenue growth or margin enhancement. We believe that we will continue to be very relevant even for any reduced spending, right, that the clients might do. I mean, at the end of the day, the idea is that clients are not going to completely stop data analytics initiatives even if the going gets stuff but rather, they will reorient their spending to the right kind of initiatives.

We witnessed this during the pandemic as well. And we have seen instances where clients chose to continue to work with us on specific initiatives, right, that were very relevant and important for them in those turbulent times. So our thinking and orientation at this time is to continuously look for those kind of value propositions that will continue to stay relevant, even if there are headwinds that our clients experience in their own context. So a lot of our investment are hiring the development that we are doing internally is all oriented and geared in that direction. So we believe that we are on a good wicket in terms of how we are shaping up.

Also, we see that even if there are some headwinds and there is some sluggishness, that will also be a good time to double down and build on the kind of capabilities that will be necessary to help address concerns emerging out of that slump price whenever that happens. So we’ll continue to invest aggressively on capability building as well as relationship building, right, in the coming quarters. And we believe that, that will be the right approach from a long-term growth perspective. So broadly, those are the thoughts that I had, right in terms of how we are looking at the coming quarters. Raj, if you want to add anything, please go ahead, and we can close after that.

Rajan Venkatesan — Chief Financial Officer

Nothing- nothing else. And I think we pretty much covered most of what we had to during the course of the call, and I think you’ve summarized it really well so, nothing else to add on to that.

Rajan Sethuraman — Chief Executive Officer

Thanks, Raj.

Operator

[Operator Closing Remarks]